Planning An International Move? What Should You Do About Car Insurance?

13 January 2015
 Categories: Insurance, Articles


Whether you're a Canadian making the trek to the U.S. to live or work, or an American who has decided to try life in Canada for a while, you've probably been making preparations to transfer your legal residency across the border. One of these preparations involves the transfer of your auto insurance to a company that provides coverage in your new location. Read on to learn what you should do to make your car (and you as a driver) legal once you've crossed the border.

What should you do about your car insurance if you are an American moving to Canada?

The type of insurance you should purchase in Canada entirely depends upon your residency plans. If you are attending college or visiting for only a short time without seeking citizenship, you may be able to stay with a U.S.-based insurance company. Many American auto policies (particularly those offered in states at the Canadian border) offer insurance coverage for short-term or temporary stays in Canada, as well as coverage for trips to the U.S. If you'll be traveling back to the U.S. frequently, it is also a good idea to retain U.S. coverage, as it is generally available at a lower cost to citizens.

When you drive in Canada, you need several different types of insurance, depending upon the province in which you reside. For example, if you reside in Quebec and are injured in a car accident, any injuries you suffer are paid for by the Quebec government. You therefore have no need to purchase personal injury coverage. However, in order to pay for any damages caused to another driver or to your vehicle, you'll need to purchase private insurance. In addition, if you're traveling outside Quebec and are involved in an accident, your normal auto insurance may not cover your injuries or the cost of repairs to your vehicle.

Be sure to research the insurance law in the province to which you plan to move, as well as any provinces you plan to frequently visit, as these policies can vary widely.

If you're planning to become a permanent resident or citizen and are currently covered by U.S. insurance, you may wish to go ahead and switch to a Canadian insurance provider. It's better to switch sooner rather than later if you're planning to stay, as building up a relationship with one specific insurer can qualify you for discounts and competitive pricing.

What should you do about your car insurance if you are a Canadian moving to the U.S.?

As with Canadian law, U.S. law can vary widely by jurisdiction. Although each state mandates that you have some type of auto insurance coverage, the minimum level of coverage you are required to have is different in each state. Certain Canadian policies will also cover you while traveling in the U.S., but you may want to purchase an additional U.S. policy, regardless of whether you're intending on a quick stay or a more permanent relocation. Most of these travel policies are available for variable periods, so you should be able to find coverage whether you're staying only a week or two or for months at a time.

If you choose only to purchase the minimum coverage required by your state, be aware that you can be personally sued for any injuries or damages caused by an accident in which you are deemed at fault. If your insurance coverage is insufficient to pay the medical or property damage expenses incurred by the other driver, you'll be responsible for any costs in excess of this amount. It's generally a good idea to purchase insurance through an agent, who can help guide you on the type of coverage that best protects you.

For more information, contact a local insurance company, like Preferred Insurance.